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How Naked Wines’ Acquires and Retains Customers

Naked Wines is a truly innovative brand and one that I, both as a customer and as a marketer, greatly admire. From a customer’s perspective, they relentlessly infuse dynamism into their business and are a genuinely friendly voice in the overly sniffy wine retail segment.

Putting on my marketing hat, their website’s user experience (UX) proves extremely strong in the area of persuasive psychology; their copywriting — on-site and within customer communications — is crisply written, with an easily identifiable tone of voice to go along with it.

They also consistently employ a surprise and delight factor, ranging from their numerous stories about the winemakers they support to the free bottle of ‘premium’ wine that they offer with monthly case purchases.

Not just another commoditized eCommerce operation in the usual ‘here are our products – buy them from us’ format, Naked Wines infuses a strong sense of community, blending stories from winemakers (whom members fund, can follow, provide feedback to and exchange messages with) with products that can be purchased.

It is a tall effort for entrepreneurs and marketers to build and deliver a truly social experience into a retail environment, but Naked Wines seem to have nailed it.

Table of Content

For the purpose of breaking this guide into concise chunks, here is an outline of specific sections:

My Experience as a Customer

I joined their site in October 2014 and according to a Gmail search, have received a total of 52 emails from Naked Wines since I signed up. That is an average of 6 emails per month, or 1.5 emails a week, which I have been absolutely happy to receive — because they are not all necessarily about a selling proposition.

This post is geared toward unraveling how Naked Wines got me into their loop, their customer acquisition strategy and to break down their persuasive psychology techniques.

How Naked Wines Works

For those of you that do not know, here’s a quick rundown of how their business works (you can also watch the above video):
They are inherently a wine club with an eCommerce subscription model at the core; for £20 a month, their members, whom they refer to as ‘Angels’, save (or in their words ‘invest’) this amount into a pot towards their next order of a case or more of wine. Naked Wines take the money from members to fund independent winemakers from around the world, in return for exclusive wholesale prices that they pass onto their members in the form of genuine discounts. Members also get a free ‘premium’ bottle of wine each month when they order a case. As an FT article succinctly put it:

Naked Wines is the Kickstarter for vineyards.

Their 6-bottle cases range from £48 – £60 and their 12-bottle cases between £92 – £162

They operate in the UK, the USA and Australia

They have over 300,000 ‘Angels’ as customers

They have funded 130 winemakers

Their revenue in 2014 was £74 million ($116 million) and

They were also recently acquired by high street multi-channel retailers Majestic Wines for £70 million in April 2015.

How Do They Acquire Customers?

To get an idea of their customer acquisition efforts, let’s have a look at Naked Wines’ top traffic referral sources from SimilarWeb (April 2015):

Staggering… but not surprising; direct traffic accounts for 67% of desktop traffic, followed by search and link referrals.
With 300,000 members (repeat customers), I can safely deduce that a significant segment of direct traffic will come from repeat visitors. SimilarWeb’s traffic estimates (which are typically not too far off from actuals) for desktop and tablet traffic counts visits at 420,000 for the month of April.

Now let’s have a look at referral traffic, which is probably where new customers are going to be acquired from (you’ll find that Naked Wines are quite active on discounting sites). They appear to be reeling members in with wine vouchers from the likes of:

Groupon (USA)

Retailmenot (US Voucher/Coupon site)

Money Saving Expert (UK)

Here is what their offer on List.co.uk looks like (you need to commit to a basket size of £100 to qualify for this £60 voucher):

And here is their Groupon US promo page — their #1 site referral:

Not Big on SEO

Naked Wines (a £74 million business) isn’t that big on SEO — here’s a filter of the top 20 non-brand search terms driving traffic to their site. Notice the last column — each search term’s expected share of traffic to Naked Wines is less than 3% of total traffic volume (visible in column 3):

What is interesting is that the highest search volume non-brand keyword they have search rankings for is totally unrelated to their business: ‘online | Next’ just happens to appear in their title tag…

Brand awareness is, however, quite strong — with well over 50,000 brand related searches a month in the UK alone (these figures are UK only). The US is also quite similar, at over 50,000 brand name searches. For a pure-play online retailer, this volume of brand name search is impressive.

The Naked Wines team also get the basics of Technical SEO right. Here are a few eCommerce product rich snippets from a Google search result page, demonstrating their product and reviews rich snippet mark-up:

One other point worth noting with regards to their SEO is that, given Naked Wines is a wine club, you’d expect a page 1 presence for the term ‘wine club’ or ‘wine clubs’; they are actually not on the top 100 organic SERPs for both terms, but do have an AdWords presence.

Social Proof: Product Reviews

Naked Wines’ product pages are driven by the wisdom of the crowds — they have ensured that social proof is thoroughly infused into each product page template.
Let’s have a look at the breakdown of a product page:

Notice how the product description and the ‘action box’ (or Call To Action box) take up only a thin slice of the vertical space?

The rest of each product page is dedicated to driving conversations through reviews, ratings and comments to both winemakers and other members of the community.

The summary circle with the percentage point at the top right corner is more or less a scorecard for the product in view, which aids and nudges people to quickly form an opinion or purchase decision.

Social Proof: Community and Groups

Naked Wines have quite an active and well built-out community with adequate user/member hierarchy.

Users of their community are broadly split between ‘Angels’ (members) and ‘Winemakers’. But their community does also have support staff that are labeled ‘Naked Staff’. Members could be ‘Angels’, ‘Archangels’ and ‘New Angels’.

Members are able follow other members and winemakers.
This is a winemaker’s profile:

AdWords is Predominantly Brand Name

Taking a look at their AdWords campaign from SEMRush data, you would find that Naked Wines tried AdWords for about 2 years until 2012, stopped and then started again in April 2015.

Brand name search dominates their keyword inventory, but these are the top 10 non-brand keywords they seem to be bidding heavily on:

You’ll notice that they are limited by search volume.

Naked Wines’ Customer Acquisition is Triggered by Voucher Codes

Naked Wines have quite an extensive network of affiliates that push their initial voucher code offer. A Google UK search reveals their current top UK partners to be:

List.co.uk

Vouchercloud

Hotdeals.com

MoneySavingExpert.com (no current offers)

PromoPro.co.uk

Virgin Trains (ironic, given that Virgin Group also have stakes in Virgin Wines)

MyVoucherCodes.co.uk

And in their US business, they work with these top coupon code sites:

Groupon

RetailMeNot.com

LivingSocial

GoodShop

Coupons.com

CouponFollow.com

I can draw the conclusion that Naked Wines acquires a majority of their customers by converting first time buyers who claim their £20 or $20 (or more) voucher. These referrals of first time voucher claimants largely come via:

Referrals from their affiliates — high clout voucher and coupon sites

Their customer referral program

Direct response mailer flyers through Amazon (you will have no doubt come across a naked wines voucher in your Amazon delivery)

Their extremely easy to find on-site £20 voucher offer and

Word of mouth — recommendations over a glass of wine.

Other Offline Methods Naked Wines Uses to Acquire Customers

Naked Wines’ acquisition strategy is by no means restricted to digital; they utilize the following offline channels to drive awareness about their brand:

Direct response mailer flyers with other large partners

Their packaging — all of their boxes are ‘Naked Wines’ branded

Their products sell themselves. All wines have a ‘distributed by Naked Wines’ label

Wine tasting events.

How I Was Acquired as a Naked Wines Customer

I was scheduled to interview a Naked Wines exec on the 2X eCommerce podcast show and was carrying out pre-interview research — it is worth noting that I had come across Naked Wines’ vouchers a number of times both offline and online in the past.

My research led me to browse through their website… and, step by step, here is what happened:

I took their home page ‘Wine IQ Test’ feature (as it looked interesting). And from the image below, you can easily see the play of the psychology of exclusivity and urgency: ‘not for everyone’ – takes only ’43 seconds’.

Here is a video recap of how the ‘Wine IQ Test’ works:

Breaking down Naked Wines’ Checkout Process

I was then taken to the below form and eventually registered to join the ‘Angel Waiting List’. Note that this is a multi-step checkout:

Here is a breakdown of the psychology behind this form:

A few points to note from their checkout process:

It is a multiple 3-step checkout

Their lead magnet is ‘the £20 voucher’ – notice how it stands out on the header area.

The have their phone number at checkout

The psychology of exclusivity, scarcity and social proof are used in their mention of ‘joining the Angel waiting list’

They also interestingly use pre-filed email text boxes in order to reduce friction

Next, I was supposedly ‘moved up the list’ (this was the first email I received):

As you would imagine, being #5,471 in line with 1,015 people behind me immediately triggered a psychological sense of scarcity (the same feeling you get waiting in a line on Black Friday), but also social proof (the herd mentality, driven by the fact that thousands of people also want this product).

Here is a series of follow-up messages that came next…

10 Days after signing up….

I was now roughly 1,000 places forward at #4,223 and will be joining 140,000 other Angels… yippie!

3 Weeks after signing up…

I am now #3,991 in line, with 5,345 behind me… and I’m thinking wow, whatever these guys are selling is as attractive as hot cakes! They also gave me a reminding nudge to expect to make a £20 monthly deposit in order to ‘unlock great Angel benefits’.

A point to note is that there’s an opt-out at the end of the email:

1 Month from sign-up — I’m finally ‘officially an Angel’

With 6 emails received and a 4 week wait under my belt, my first £20 deposit was made, unlocking access to (in their words): exclusive wines, 25% – 50% discounts, free monthly samples when a case is ordered, group access and ‘priority’ phone access.

Customer Journey from Sign-Ups through Affiliates

If a potential customer came across a Naked Wines offer/voucher on a site such as List.co.uk (which offers a whopping £60 wine voucher), here is what their journey would look like:

When they arrive on Naked Wines’ site through the affiliate link, their voucher claim landing page will look like this — with their code and password pre-filled:

After their email address is entered, they will be taken to this page that congratulates them and emphasizes that they now have £60 to spend:

Here is a breakdown of the copy on the page from a persuasion and customer psychology standpoint:

Takeaways from the psychology behind the affiliate landing page above:

Their headline ‘congratulates’ me for my £60 voucher – despite me still about to spend £44.99

They drive in the fact that I am getting a bargain – which is in fact genuine

They are sure to infuse the psychology of scarcity but emphasizing that they are fully subscribed

Also notice the way pricing has been displayed in a tabular form, clearly stating the voucher savings that I am getting

Their 3 Step Checkout Process

Step 1

For a non-fussy potential customer, £50 for a case of wine is not a bad deal at all. This is what checkout looks like; it is a compact, non-distracting 3-step checkout:

Checkout: Step 2

You either enter your address or choose to collect from a local Majestic store:

The first field you complete at checkout is your postcode, into an address finder:

Then, still within Step 2, a delivery date list slides in after your address is fully entered:

Checkout: Step 3

And finally… the ‘Confirm and Pay’ page:

A Few Deductions about Naked Wines’ Customer Acquisition

My takeaway as both a customer and marketer is, in summary:

Naked Wines’ core customer acquisition ‘lead magnet’, driving people into their sales funnel, is their ‘voucher claim’ — if you browse their site as a non-member, the user experience that they offer always nudges you toward claiming their voucher

They are in the discount and ‘value’ segment of wine retail

Their sales and profitability do not necessarily suffer due to this, given that their business model is price-led

They are a business of scale — the more members they recruit, the greater their ability to fund quality winemakers

Their initial offers, like the £50 for a case of wine detailed above, are probably loss leaders in their bid to recruit loyal members in the long term

Despite being discounters, they still hammer home the psychology of exclusivity to potential members via their queuing system.

Naked Wines is Very Incentive Driven

Their communications consistently emphasize value and savings, right from the first £20 voucher through to the fact that members get 25% – 50% off retail prices. It is an incentive driven value proposition.

Naked Wines is Now a US Business

Their expansion to the US (and Australia) in 2012 has led to the US accounting for 65% of desktop traffic:

The #1 Outbound Destination is Facebook, from their Referral Program & Facebook Login

Deconstructing their Home Page

1. Top of the fold banner area

Their voucher claim link in the nav bar area is intentionally orange in superscript for visitors looking to claim a voucher

I also love the play with gamification – the ‘Wine IQ test’.

It is worth noting that their home page for non-signed in users looks like this — with a focus on their Wine IQ Test:

2. A collage-styled mix of community and product boxes

Which is a fine blend of community and commerce (mentioned earlier in this article). Members are able to follow winemakers as well as view featured bottles or cases of wine.

And Mobile…

Their mobile home page is also quite consistent in design with the desktop version (it is responsive):

They DO NOT have a Blog

One final point worth making is that Naked Wines have not followed the ‘business blogging’ club and deliberately do not refer to their news updates page as neither a blog nor a news page. Instead, they prefer to refer to their news updates section (for logged in users only) as simply ‘Coming Soon’. This demonstrates a forward-looking approach; all of the content on there is forward dated with no archive of older or previous posts. Updates appear to expire permanently.

Lead Generation Business — Weddings

Naked Wines have a segment of their business dedicated to retailing wine in higher volume to weddings. It is a lead generation business.

Retention is Key to their Business

Naked Wines is very much run like a Software as a Service (SaaS) business — they have a customer retention manager.
Monthly membership and retention are the life-blood of the company and so they most definitely measure metrics such as:

How they Handle Churn… My Experience

Back in February, I misplaced the credit card I had on file for my Naked Wines account… and because I didn’t update my account with new details, my monthly payment failed.

I got this automated email:

… and then, because I didn’t respond, got this follow up email 9 days later:

And then, a full month on, I got this email nudging me to update my card to avoid serious wine deprivation!

Which I still ignored…
I also had a few phone calls from their Wine Advisors prompting me to tackle the payment issue. My response to them was that I intended to update my card details at ‘some point’.

Finally, this was the email that got me to change my mind — a notice of account suspension:

How Naked Wines Infuses Retention into Email Communication…

Here are some examples of how Naked Wines quite cleverly infuse retention by giving gentle nudges to purchase in their email comms:

Giving a bottle of wine for free, with a caveat…

In order to get any of their ‘free’ bottles of wine, you have to commit to making an order — in the example below, the free bottle of Pinot Noir worth £15.99 could only be bagged if you purchased 11 other bottles of wine before 15th June.

Putting your marketing hat back on, it is immediately apparent that the June 15th deadline is an urgency heuristic plugged into their storytelling AIDA model. It is used to fuel the urge to not only buy the bottle, but to buy an entire case of wine (if you are not familiar with the storytelling AIDA model, I implore you to go through this slidedeck (ppt) on Copywriting by Noah Kagan and Neville Medhora).

This is another example of a gentle nudge — urging me to spend £100 I have accrued in my Naked Wines account to purchase 11 bottles of wine in order to get this free ‘Angel Sample’.

Notice the small print:

Shopping cart abandonment emails are friendly and light-hearted

This is an email I received when I failed to complete an order:

Again, notice how personal it is, from a guy named ‘Eamon’ — the ‘Naked Wine Guy’. The tone of voice is very friendly and conversational… he asked me to grab my freebie before it turned into a pumpkin!

Even the delivery notification emails are fun

This is another email from ‘Eamon’ the Wine Guy — asking me to get glasses ready… because their delivery company has told him my case of wine has been delivered.

Driving Retention with their Mobile App

Given that customer retention is the nucleus of Naked Wines’ operations, their mobile app plays quite an important role in driving engagement. Their footer persistently links (from a banner) to their mobile app download page.

Although I have not tried out their app, it is a worthy takeaway for similar eCommerce businesses with retention in the form of monthly subscriptions built into their business model to consider mobile apps as an additional means by which to provide access and drive engagement with their customers or members.

Naked Wines executes its experiential marketing strategy predominantly through running huge wine tasting events across every country it operates in. Additionally, they engage their members in a voting process to decide which cities make the cut. Here in the UK, events are run in most major cities and appear to frequently sell out:

I am inclined to think that the Naked Wines tasting tours are not only revenue drivers but might also be profitable. This is because Naked Wines nudges its members to purchase a 12-bottle case of wine at these events for a £15 discount (the value of their ticket, although worded as a ‘ticket money back’ offer in addition to their ‘Angel discount’).

My Conclusions on Naked Wines’ Retention Strategy

Their wine events — members even get to vote the city/town of the next event

The Winemaker of the Year (along with pictures)

Orders, emphasising the deep discounts they are receiving

I also intend to write another blog post, dedicated to Naked Wines’ customer retention email marketing strategy, which will categorise the different types of emails I receive from Naked Wines.

Rounding Up

By now, you probably think that I drink way too much wine — having hung around the Naked Wines site for this long!

I’ll summarise by concluding that I think Naked Wines are one of the UK’s most sophisticated and innovative online retailers, from a consumer psychology, tone of voice and customer retention standpoint. They make for a brilliant case study for any business looking to sharpen their retention efforts and also customer perception from a communications angle.

Their customer acquisition is spearheaded by a voucher code distribution strategy through an extensive network of influential online and offline partners. Their objective is to get as many people as possible to see, and hopefully use, the voucher. They are not big on SEO and PPC because, in their business, ‘Search’ has a limited reach.

The habits of a significant number of shoppers do not involve searching online for where to buy wine; they simply shop at grocery stores, local wine shops or online wine stores with which they are already familiar. Naked wines has had to use its voucher code as a magnet to draw potential customers to its doors — and then, with its brilliant retention efforts, has managed to convince these leads to change their habits. The result is, as previously mentioned, that Naked Wines currently has more than 300,000 customers funding more than 130 winemakers.

When they get customers to commit to becoming members, their customer retention efforts are powered by two major channels:

Email marketing

Their online community

Their email marketing communications are, dare I say it, award worthy. Their tone of voice is conversational and they do not overtly ‘advertise’ with flashy html banner emails — they simply use text emails, the likes of which could come from a friend and do not in any way come across as aggressively seeking a sale. Their community, again, is a huge winner — they offer you the access to speak with the maker of the bottle of wine you just drank. You can also speak to other wine aficionados.

Search

How Naked Wines’ Acquires and Retains Customers

Naked Wines is a truly innovative brand and one that I, both as a customer and as a marketer, greatly admire. From a customer’s perspective, they relentlessly infuse dynamism into their business and are a genuinely friendly voice in the overly sniffy wine retail segment.

Putting on my marketing hat, their website’s user experience (UX) proves extremely strong in the area of persuasive psychology; their copywriting — on-site and within customer communications — is crisply written, with an easily identifiable tone of voice to go along with it.

They also consistently employ a surprise and delight factor, ranging from their numerous stories about the winemakers they support to the free bottle of ‘premium’ wine that they offer with monthly case purchases.

Not just another commoditized eCommerce operation in the usual ‘here are our products – buy them from us’ format, Naked Wines infuses a strong sense of community, blending stories from winemakers (whom members fund, can follow, provide feedback to and exchange messages with) with products that can be purchased.

It is a tall effort for entrepreneurs and marketers to build and deliver a truly social experience into a retail environment, but Naked Wines seem to have nailed it.

Table of Content

For the purpose of breaking this guide into concise chunks, here is an outline of specific sections:

My Experience as a Customer

I joined their site in October 2014 and according to a Gmail search, have received a total of 52 emails from Naked Wines since I signed up. That is an average of 6 emails per month, or 1.5 emails a week, which I have been absolutely happy to receive — because they are not all necessarily about a selling proposition.

This post is geared toward unraveling how Naked Wines got me into their loop, their customer acquisition strategy and to break down their persuasive psychology techniques.

How Naked Wines Works

For those of you that do not know, here’s a quick rundown of how their business works (you can also watch the above video):
They are inherently a wine club with an eCommerce subscription model at the core; for £20 a month, their members, whom they refer to as ‘Angels’, save (or in their words ‘invest’) this amount into a pot towards their next order of a case or more of wine. Naked Wines take the money from members to fund independent winemakers from around the world, in return for exclusive wholesale prices that they pass onto their members in the form of genuine discounts. Members also get a free ‘premium’ bottle of wine each month when they order a case. As an FT article succinctly put it:

Naked Wines is the Kickstarter for vineyards.

Their 6-bottle cases range from £48 – £60 and their 12-bottle cases between £92 – £162

They operate in the UK, the USA and Australia

They have over 300,000 ‘Angels’ as customers

They have funded 130 winemakers

Their revenue in 2014 was £74 million ($116 million) and

They were also recently acquired by high street multi-channel retailers Majestic Wines for £70 million in April 2015.

How Do They Acquire Customers?

To get an idea of their customer acquisition efforts, let’s have a look at Naked Wines’ top traffic referral sources from SimilarWeb (April 2015):

Staggering… but not surprising; direct traffic accounts for 67% of desktop traffic, followed by search and link referrals.
With 300,000 members (repeat customers), I can safely deduce that a significant segment of direct traffic will come from repeat visitors. SimilarWeb’s traffic estimates (which are typically not too far off from actuals) for desktop and tablet traffic counts visits at 420,000 for the month of April.

Now let’s have a look at referral traffic, which is probably where new customers are going to be acquired from (you’ll find that Naked Wines are quite active on discounting sites). They appear to be reeling members in with wine vouchers from the likes of:

Groupon (USA)

Retailmenot (US Voucher/Coupon site)

Money Saving Expert (UK)

Here is what their offer on List.co.uk looks like (you need to commit to a basket size of £100 to qualify for this £60 voucher):

And here is their Groupon US promo page — their #1 site referral:

Not Big on SEO

Naked Wines (a £74 million business) isn’t that big on SEO — here’s a filter of the top 20 non-brand search terms driving traffic to their site. Notice the last column — each search term’s expected share of traffic to Naked Wines is less than 3% of total traffic volume (visible in column 3):

What is interesting is that the highest search volume non-brand keyword they have search rankings for is totally unrelated to their business: ‘online | Next’ just happens to appear in their title tag…

Brand awareness is, however, quite strong — with well over 50,000 brand related searches a month in the UK alone (these figures are UK only). The US is also quite similar, at over 50,000 brand name searches. For a pure-play online retailer, this volume of brand name search is impressive.

The Naked Wines team also get the basics of Technical SEO right. Here are a few eCommerce product rich snippets from a Google search result page, demonstrating their product and reviews rich snippet mark-up:

One other point worth noting with regards to their SEO is that, given Naked Wines is a wine club, you’d expect a page 1 presence for the term ‘wine club’ or ‘wine clubs’; they are actually not on the top 100 organic SERPs for both terms, but do have an AdWords presence.

Social Proof: Product Reviews

Naked Wines’ product pages are driven by the wisdom of the crowds — they have ensured that social proof is thoroughly infused into each product page template.
Let’s have a look at the breakdown of a product page:

Notice how the product description and the ‘action box’ (or Call To Action box) take up only a thin slice of the vertical space?

The rest of each product page is dedicated to driving conversations through reviews, ratings and comments to both winemakers and other members of the community.

The summary circle with the percentage point at the top right corner is more or less a scorecard for the product in view, which aids and nudges people to quickly form an opinion or purchase decision.

Social Proof: Community and Groups

Naked Wines have quite an active and well built-out community with adequate user/member hierarchy.

Users of their community are broadly split between ‘Angels’ (members) and ‘Winemakers’. But their community does also have support staff that are labeled ‘Naked Staff’. Members could be ‘Angels’, ‘Archangels’ and ‘New Angels’.

Members are able follow other members and winemakers.
This is a winemaker’s profile:

AdWords is Predominantly Brand Name

Taking a look at their AdWords campaign from SEMRush data, you would find that Naked Wines tried AdWords for about 2 years until 2012, stopped and then started again in April 2015.

Brand name search dominates their keyword inventory, but these are the top 10 non-brand keywords they seem to be bidding heavily on:

You’ll notice that they are limited by search volume.

Naked Wines’ Customer Acquisition is Triggered by Voucher Codes

Naked Wines have quite an extensive network of affiliates that push their initial voucher code offer. A Google UK search reveals their current top UK partners to be:

List.co.uk

Vouchercloud

Hotdeals.com

MoneySavingExpert.com (no current offers)

PromoPro.co.uk

Virgin Trains (ironic, given that Virgin Group also have stakes in Virgin Wines)

MyVoucherCodes.co.uk

And in their US business, they work with these top coupon code sites:

Groupon

RetailMeNot.com

LivingSocial

GoodShop

Coupons.com

CouponFollow.com

I can draw the conclusion that Naked Wines acquires a majority of their customers by converting first time buyers who claim their £20 or $20 (or more) voucher. These referrals of first time voucher claimants largely come via:

Referrals from their affiliates — high clout voucher and coupon sites

Their customer referral program

Direct response mailer flyers through Amazon (you will have no doubt come across a naked wines voucher in your Amazon delivery)

Their extremely easy to find on-site £20 voucher offer and

Word of mouth — recommendations over a glass of wine.

Other Offline Methods Naked Wines Uses to Acquire Customers

Naked Wines’ acquisition strategy is by no means restricted to digital; they utilize the following offline channels to drive awareness about their brand:

Direct response mailer flyers with other large partners

Their packaging — all of their boxes are ‘Naked Wines’ branded

Their products sell themselves. All wines have a ‘distributed by Naked Wines’ label

Wine tasting events.

How I Was Acquired as a Naked Wines Customer

I was scheduled to interview a Naked Wines exec on the 2X eCommerce podcast show and was carrying out pre-interview research — it is worth noting that I had come across Naked Wines’ vouchers a number of times both offline and online in the past.

My research led me to browse through their website… and, step by step, here is what happened:

I took their home page ‘Wine IQ Test’ feature (as it looked interesting). And from the image below, you can easily see the play of the psychology of exclusivity and urgency: ‘not for everyone’ – takes only ’43 seconds’.

Here is a video recap of how the ‘Wine IQ Test’ works:

Breaking down Naked Wines’ Checkout Process

I was then taken to the below form and eventually registered to join the ‘Angel Waiting List’. Note that this is a multi-step checkout:

Here is a breakdown of the psychology behind this form:

A few points to note from their checkout process:

It is a multiple 3-step checkout

Their lead magnet is ‘the £20 voucher’ – notice how it stands out on the header area.

The have their phone number at checkout

The psychology of exclusivity, scarcity and social proof are used in their mention of ‘joining the Angel waiting list’

They also interestingly use pre-filed email text boxes in order to reduce friction

Next, I was supposedly ‘moved up the list’ (this was the first email I received):

As you would imagine, being #5,471 in line with 1,015 people behind me immediately triggered a psychological sense of scarcity (the same feeling you get waiting in a line on Black Friday), but also social proof (the herd mentality, driven by the fact that thousands of people also want this product).

Here is a series of follow-up messages that came next…

10 Days after signing up….

I was now roughly 1,000 places forward at #4,223 and will be joining 140,000 other Angels… yippie!

3 Weeks after signing up…

I am now #3,991 in line, with 5,345 behind me… and I’m thinking wow, whatever these guys are selling is as attractive as hot cakes! They also gave me a reminding nudge to expect to make a £20 monthly deposit in order to ‘unlock great Angel benefits’.

A point to note is that there’s an opt-out at the end of the email:

1 Month from sign-up — I’m finally ‘officially an Angel’

With 6 emails received and a 4 week wait under my belt, my first £20 deposit was made, unlocking access to (in their words): exclusive wines, 25% – 50% discounts, free monthly samples when a case is ordered, group access and ‘priority’ phone access.

Customer Journey from Sign-Ups through Affiliates

If a potential customer came across a Naked Wines offer/voucher on a site such as List.co.uk (which offers a whopping £60 wine voucher), here is what their journey would look like:

When they arrive on Naked Wines’ site through the affiliate link, their voucher claim landing page will look like this — with their code and password pre-filled:

After their email address is entered, they will be taken to this page that congratulates them and emphasizes that they now have £60 to spend:

Here is a breakdown of the copy on the page from a persuasion and customer psychology standpoint:

Takeaways from the psychology behind the affiliate landing page above:

Their headline ‘congratulates’ me for my £60 voucher – despite me still about to spend £44.99

They drive in the fact that I am getting a bargain – which is in fact genuine

They are sure to infuse the psychology of scarcity but emphasizing that they are fully subscribed

Also notice the way pricing has been displayed in a tabular form, clearly stating the voucher savings that I am getting

Their 3 Step Checkout Process

Step 1

For a non-fussy potential customer, £50 for a case of wine is not a bad deal at all. This is what checkout looks like; it is a compact, non-distracting 3-step checkout:

Checkout: Step 2

You either enter your address or choose to collect from a local Majestic store:

The first field you complete at checkout is your postcode, into an address finder:

Then, still within Step 2, a delivery date list slides in after your address is fully entered:

Checkout: Step 3

And finally… the ‘Confirm and Pay’ page:

A Few Deductions about Naked Wines’ Customer Acquisition

My takeaway as both a customer and marketer is, in summary:

Naked Wines’ core customer acquisition ‘lead magnet’, driving people into their sales funnel, is their ‘voucher claim’ — if you browse their site as a non-member, the user experience that they offer always nudges you toward claiming their voucher

They are in the discount and ‘value’ segment of wine retail

Their sales and profitability do not necessarily suffer due to this, given that their business model is price-led

They are a business of scale — the more members they recruit, the greater their ability to fund quality winemakers

Their initial offers, like the £50 for a case of wine detailed above, are probably loss leaders in their bid to recruit loyal members in the long term

Despite being discounters, they still hammer home the psychology of exclusivity to potential members via their queuing system.

Naked Wines is Very Incentive Driven

Their communications consistently emphasize value and savings, right from the first £20 voucher through to the fact that members get 25% – 50% off retail prices. It is an incentive driven value proposition.

Naked Wines is Now a US Business

Their expansion to the US (and Australia) in 2012 has led to the US accounting for 65% of desktop traffic:

The #1 Outbound Destination is Facebook, from their Referral Program & Facebook Login

Deconstructing their Home Page

1. Top of the fold banner area

Their voucher claim link in the nav bar area is intentionally orange in superscript for visitors looking to claim a voucher

I also love the play with gamification – the ‘Wine IQ test’.

It is worth noting that their home page for non-signed in users looks like this — with a focus on their Wine IQ Test:

2. A collage-styled mix of community and product boxes

Which is a fine blend of community and commerce (mentioned earlier in this article). Members are able to follow winemakers as well as view featured bottles or cases of wine.

And Mobile…

Their mobile home page is also quite consistent in design with the desktop version (it is responsive):

They DO NOT have a Blog

One final point worth making is that Naked Wines have not followed the ‘business blogging’ club and deliberately do not refer to their news updates page as neither a blog nor a news page. Instead, they prefer to refer to their news updates section (for logged in users only) as simply ‘Coming Soon’. This demonstrates a forward-looking approach; all of the content on there is forward dated with no archive of older or previous posts. Updates appear to expire permanently.

Lead Generation Business — Weddings

Naked Wines have a segment of their business dedicated to retailing wine in higher volume to weddings. It is a lead generation business.

Retention is Key to their Business

Naked Wines is very much run like a Software as a Service (SaaS) business — they have a customer retention manager.
Monthly membership and retention are the life-blood of the company and so they most definitely measure metrics such as:

How they Handle Churn… My Experience

Back in February, I misplaced the credit card I had on file for my Naked Wines account… and because I didn’t update my account with new details, my monthly payment failed.

I got this automated email:

… and then, because I didn’t respond, got this follow up email 9 days later:

And then, a full month on, I got this email nudging me to update my card to avoid serious wine deprivation!

Which I still ignored…
I also had a few phone calls from their Wine Advisors prompting me to tackle the payment issue. My response to them was that I intended to update my card details at ‘some point’.

Finally, this was the email that got me to change my mind — a notice of account suspension:

How Naked Wines Infuses Retention into Email Communication…

Here are some examples of how Naked Wines quite cleverly infuse retention by giving gentle nudges to purchase in their email comms:

Giving a bottle of wine for free, with a caveat…

In order to get any of their ‘free’ bottles of wine, you have to commit to making an order — in the example below, the free bottle of Pinot Noir worth £15.99 could only be bagged if you purchased 11 other bottles of wine before 15th June.

Putting your marketing hat back on, it is immediately apparent that the June 15th deadline is an urgency heuristic plugged into their storytelling AIDA model. It is used to fuel the urge to not only buy the bottle, but to buy an entire case of wine (if you are not familiar with the storytelling AIDA model, I implore you to go through this slidedeck (ppt) on Copywriting by Noah Kagan and Neville Medhora).

This is another example of a gentle nudge — urging me to spend £100 I have accrued in my Naked Wines account to purchase 11 bottles of wine in order to get this free ‘Angel Sample’.

Notice the small print:

Shopping cart abandonment emails are friendly and light-hearted

This is an email I received when I failed to complete an order:

Again, notice how personal it is, from a guy named ‘Eamon’ — the ‘Naked Wine Guy’. The tone of voice is very friendly and conversational… he asked me to grab my freebie before it turned into a pumpkin!

Even the delivery notification emails are fun

This is another email from ‘Eamon’ the Wine Guy — asking me to get glasses ready… because their delivery company has told him my case of wine has been delivered.

Driving Retention with their Mobile App

Given that customer retention is the nucleus of Naked Wines’ operations, their mobile app plays quite an important role in driving engagement. Their footer persistently links (from a banner) to their mobile app download page.

Although I have not tried out their app, it is a worthy takeaway for similar eCommerce businesses with retention in the form of monthly subscriptions built into their business model to consider mobile apps as an additional means by which to provide access and drive engagement with their customers or members.

Naked Wines executes its experiential marketing strategy predominantly through running huge wine tasting events across every country it operates in. Additionally, they engage their members in a voting process to decide which cities make the cut. Here in the UK, events are run in most major cities and appear to frequently sell out:

I am inclined to think that the Naked Wines tasting tours are not only revenue drivers but might also be profitable. This is because Naked Wines nudges its members to purchase a 12-bottle case of wine at these events for a £15 discount (the value of their ticket, although worded as a ‘ticket money back’ offer in addition to their ‘Angel discount’).

My Conclusions on Naked Wines’ Retention Strategy

Their wine events — members even get to vote the city/town of the next event

The Winemaker of the Year (along with pictures)

Orders, emphasising the deep discounts they are receiving

I also intend to write another blog post, dedicated to Naked Wines’ customer retention email marketing strategy, which will categorise the different types of emails I receive from Naked Wines.

Rounding Up

By now, you probably think that I drink way too much wine — having hung around the Naked Wines site for this long!

I’ll summarise by concluding that I think Naked Wines are one of the UK’s most sophisticated and innovative online retailers, from a consumer psychology, tone of voice and customer retention standpoint. They make for a brilliant case study for any business looking to sharpen their retention efforts and also customer perception from a communications angle.

Their customer acquisition is spearheaded by a voucher code distribution strategy through an extensive network of influential online and offline partners. Their objective is to get as many people as possible to see, and hopefully use, the voucher. They are not big on SEO and PPC because, in their business, ‘Search’ has a limited reach.

The habits of a significant number of shoppers do not involve searching online for where to buy wine; they simply shop at grocery stores, local wine shops or online wine stores with which they are already familiar. Naked wines has had to use its voucher code as a magnet to draw potential customers to its doors — and then, with its brilliant retention efforts, has managed to convince these leads to change their habits. The result is, as previously mentioned, that Naked Wines currently has more than 300,000 customers funding more than 130 winemakers.

When they get customers to commit to becoming members, their customer retention efforts are powered by two major channels:

Email marketing

Their online community

Their email marketing communications are, dare I say it, award worthy. Their tone of voice is conversational and they do not overtly ‘advertise’ with flashy html banner emails — they simply use text emails, the likes of which could come from a friend and do not in any way come across as aggressively seeking a sale. Their community, again, is a huge winner — they offer you the access to speak with the maker of the bottle of wine you just drank. You can also speak to other wine aficionados.